In my home state of Louisiana, everybody has a favorite Cajun joke. Mine is about the Cajun who was inspired to write a cookbook after watching "Wild Kingdom."
In the current state of healthcare, there are quite a few "wild animals": dissatisfaction among doctors about compensation rates, anxiety of consumers about the stability of their health plans, frustration among employers about costs going up and benefits going down.
To improve the situation, we need inspiration—and solutions.
Too many approaches have a negative effect on one or more of the trilogy of parties that are critical to health care delivery: the doctors, the health plan and the buyer. When any one of these parties feels disadvantaged—for example, doctors and hospitals whose payments are so low they publicly refuse to participateÑthey can’t cooperate in finding a solution.
As a CPA and the CEO of a small business, it’s my job to keep the company’s bottom line healthy. It’s also my job to make sure employees have the access to health care they need. Like other small employers, I have been presented with fewer benefit options but large increases in premiums. I haven’t been given the information I need to become an intelligent buyer of group insurance. I haven’t been able to shape a benefit plan around my employees’ needs and the company’s pocket. In fact, I’ve felt unable to have any influence on my health-care situation.
I’m also a family man and individual health-care consumer and CEO of the Pacific Foundation for Medical Care. Because I wear several hats, I feel I’m in a unique position to hear the concerns of all sides and to look for a solution that will work for all of us.
Keeping doctors happy
Remember when doctors drove the most expensive cars and lived in the most exclusive neighborhoods? Because of their income and education, doctors were on a pedestal in the eyes of society. Doctors are still highly respected in their communities, deservedly so, but the picture has changed.
The closure of a local HMO, Health Plan of the Redwoods—once Sonoma County’s premier health maintenance organization—zinged a lot of physicians. Even before the HPR bankruptcy, some doctors struggled to keep their practices open and pay their mortgages as the HMO and managed care environment deteriorated around them. Some packed up and left the state. Under the circumstances, it’s remarkable to me that, according to a recent survey, local doctors still devote nearly half of their time to offering care without adequate, or in some cases any, compensation. If doctors are no longer on the pedestal, they are still incredibly generous with their time and skills.
Doctors have to pay their bills just like the rest of us, including health-care costs for their employees, and getting compensated for their services helps them do that. It’s no wonder that physician membership in Sonoma County’s medical association is at an all-time high. As a profession, doctors are keenly interested in systemic change.
We need to keep doctors happy, not because of a principle of "entitlement," but because they are a vital part of the health-care equation. Patients, by and large, look up to their doctors and place their trust in them. They (we) need stable physician panels. And we need HMOs and PPOs that compensate providers fairly without either forcing themselves into a corner financially or placing undue burdens on their members.
Small groups, big issues
From the perspective of some health plans, there’s no problem with small groupsÑas long as they can afford high premiums. The problem for companies like mine, with 50 or fewer employees, is that HMOs charge the same fee every month, even if employees use medical services only a few times a year.
Small businesses wonder why they’re paying so much more than the actual cost of their employees’ doctor visits. It doesn’t seem fair to pay sky-high premiums that don’t accurately reflect their group’s use of services. The explanation that health plans have always worked this way doesn’t satisfy employers anymore. And while many employers, like me, believe we can all be better educated about where our health-care dollars are going, it’s not much of a solution to simply raise employees’ premiums. Especially when it isn’t the only way.
Some employers who are looking for new solutions have turned to alternative plans, including cafeteria plans, medical savings accounts and hybrid plans. As a CPA, I appreciate the tax advantages plans like these offer. As a CEO and health-care consumer, I also appreciate their flexibility and affordability.
Broker expertise
I was with my broker one day when I wondered aloud if there wasn’t a way to combine limited self-funding with major medical coverage from a large carrier. I’m sure I wasn’t unique in asking the question, but my broker may have been unique in coming up with an answer. As a result, my company has had such a plan in place for a year. With our new coverage, we have saved 50% over our previous year’s health-care costs. We started with our insurance carrier’s catastrophic-care coverage and added additional services and benefits for routine care, resulting in a tailor-made plan that meets our needs. We receive monthly reports that show exactly where our health-care dollars are going. Our plan is also flexible. We can modify benefits as we go, adding some and replacing others that our employees want or need.
"It’s all about me"
Have you heard people use the expression "It’s all about me" when they’re admitting that what they’re saying sounds self-serving?
Health care is a personal matter. When it comes down to it, if you’re the one who needs a doctor or a hospital, it is all about you. As I’ve said, I’m both an employer and CPA and an individual consumer of healt hcare. No matter how devoted any of us are to our jobs, we shouldn’t lose sight of what matters most to us. While balancing the health-care equation is in society’s best interest, at the end of the day I’m a husband and father who wants good health for my family and health care when we need it.
What if I weren’t a CEO but a construction worker? My health-care needs would be different if heavy lifting and hard physical labor were part of my job. Everyone’s healthcare needs are different, and good health coverage for one person can be inadequate for another. That is why I am such an advocate of the flexibility our health plan offers. We can also choose a doctor, chiropractor or hospital from the largest network in California.
One company I know of customized their plan literally around the aches and pains of its employees. Their work involves strenuous physical activity, and the employees needed regular massage therapy to counteract the effects of regular strain. Massage therapy may sound like a luxury to some people; but this group’s plan allows them to partially self-fund and thus to afford alternative care that only a high-cost plan used to cover.
Along with becoming better-educated consumers who feel secure with their health coverage, there is another advantage on the personal side. The employee who has a voice in determining his or her health-care coverage is an empowered employee. Morale improves when employees are given the opportunity to participate in decision making.
A challenge
To balance the health-care equation requires a commitment on the part of all of usÑdoctors, health plans, and employers and employees. If everyone is thinking that someone else should absorb more of the rising costs, real solutions are going to evade us. Just raising employees’ contribution is not the solution.
According to data from the 2001 California Health Interview Survey, 16.6% of working Californians were not offered health coverage. Assuming some of these employees have dependents, that number represents a lot of Californians who need health care. We can do better.
Applicants for jobs with small employers used to expect that health coverage wouldn’t be offered. Today, employers with a staff of only two can purchase affordable health care. I challenge brokers and my fellow small employers to raise the percentage of us that offer health coverage. In 2003, we should take advantage of the new products on the market and insure our employees. In addition, those of us who have a mission statement can begin by adding one sentence: "Our work environment actively supports our employees’ health and wellness." Brokers can help, too, by informing small employer groups of new products in the marketplace.
Small groups in the news
Health coverage for Americans has been hotly debated for a decade. This topic will not only continue to make headlines, it will get hotter through the Presidential campaigns of the next two years. Health care will be a significant campaign issue, and the problems of small employers and their uninsured workers are going to move center stage.
To find workable solutions to the health-care crisis, all of us are going to have to move out of our comfort zones and try something we haven’t tried before. This may mean setting ambitious goals to raise the number of California’s working insured. It may mean offering more information to employers and employees so they can use their health-care dollars wisely. It may mean creating new products for small groups. Creative thinkers will emerge as health-care leaders.
Now, anyone for alligator stew?
John Nacol, CPA, is CEO of Santa Rosa-based Redwood Health Services and Pacific Foundation for Medical Care, a nonprofit, physician-run network of health-care providers."
